Foxconn, Apple pledge improving conditions as a competitive strength

Apple is going to stump up cash to help Foxconn improve labour conditions at the Chinese factories that assemble iPhones and iPads.

Foxconn chief Terry “what is wrong with being a sweatshop” Gou did not give a figure for the costs. The outfit has been paying PR people to fight a perception its vast plants in China are sweatshops with poor conditions.

He insists that the criticisms are unfair as things are better at Foxconn than they are at other plants.

Gou told Reuters that improving factory conditions is not a cost. It is a competitive strength. He said that Apple sees this as a competitive strength along with Foxconn, so the two will split the initial bill. It seems that the split would be 50/50.

If both sides saw this as a competitive strength then it’s interesting that it took several international outcries to make them see it.

Already Foxconn has announced wage hikes for workers by 16 to 25 percent, and in late March it reached an agreement with Apple to hire tens of thousands of new workers to reduce overtime work.

The company has a problem in that Chinese labour costs are rising. While it has managed to keep these down by relocating plants to areas of China where wages are lower, it is fast running out of options. Gou has previously expressed interest in more automation.